Required information The lease term is the contractual lease term modified by any renewal or termination options that are reasonably certain to be exercised or not exercised. Options whose exercise is under the control of the lessor are automatically included. Lease payments include payments resulting from those options as well as excess guaranteed residual values. The calculation of the present value of lease payments at the beginning of the lease does not include any variable lease payments, unless those payments are in-substance fixed payments or if they are based solely on an index or rate.

When a lessee makes an entry at the beginning of a lease, which of the following are included in the amount that will be recorded as both a right-of-use asset and a lease liability? (Select all that apply.)

Check All That Apply

a. Fair value of the asset leased

b. Present value of a cash payment expected to be made at the end of the lease term because of a guaranteed residual value

c. Present value of expected residual value

d. Present value of periodic lease payments

e. Sum of the payments made over the term of the lease